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Coinbase CEO: we're preparing to go to court with the U.S. SEC

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Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#131

Post by rchaud »

0zemp1c wrote: post #7

I actually agree with Armstrong here - the SEC has had plenty of time to assess the market for crypto products and offer clear rules...it almost feels like the indecisiveness is an intentional policy used to cow the industry.

Perhaps you're just taking Coinbase at their word? SEC's assessment appears to be that a business like Coinbase should register as a securities exchange.

In 2021, SEC served Coinbase a Wells Notice over that their "Lend" product (yield in USDC) was likely in violation of established case law, US v Howey and Reves v Ernst and Young. Coinbase discloses this on their own blog, under the hilarious title "The SEC has told us it wants to sue us over Lend. We don’t know why"[0]

[0]https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-t...

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#132

Post by SpicyLemonZest »

legitster wrote: post #127
chomp wrote: post #33

There's a few people picking sides here in the comments. Just reminding everybody that it's possible for two sides to be at issue; the SEC can be trying its best to apply its mandate in a world where technology has surpassed the law, and in a void of congressional action, and as a result giving very vague guidance so that it can squeeze its mandate into the crypto realm. And Coinbase can be purposely threading the ne…

I think part of the issue here is that the SEC is being decidedly coy. The remedy they are seeking is for the industry to essentially end itself. I think it's fine to say that the SEC is trying it's best to apply a mandate and them seeking guidance from congress are all good ideas, but them beating around the bush and attempting some subterfuge is not a good look for a regulatory agency.

The SEC isn't being coy at all. The current SEC chair has said repeatedly ever since he was appointed that most crypto assets are clearly securities under the existing law, and therefore crypto exchanges must register as securities exchanges. Crypto industry execs would just prefer to be unregulated, and are pretending to be confused about what the SEC wants to trick you into taking their side.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#133

Post by johndhi »

ProjectArcturis wrote: post #129
johndhi wrote: post #68

This story is INCREDIBLY interesting on a lot of levels. Here's one level: Paul Grewal, the 'head lawyer' referred to in the underlying articles, is a former United States federal (magistrate) judge. He was the judge who oversaw part of the Apple v. Samsung patent cases, some of the biggest technology cases litigated in history. In other words, he's basically as respected in the legal community as you can possibly im…

This an existential issue for Coinbase, so it's not surprising they would shell out for the best lawyer they could get. And it's not surprising that Grewal would quit his judgeship for a payment that's probably more than 10x his annual salary. Grewal is risking very little. He'll be set for life regardless of how this turns out.

That's the thing -- it feels risky (at least for me, a lawyer) because being a federal judge is like the most coveted position in the world, and lawyers are incredibly serious people about maintaining their reputations and impartiality etc.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#134

Post by johndhi »

iudqnolq wrote: post #122
johndhi wrote: post #68

This story is INCREDIBLY interesting on a lot of levels. Here's one level: Paul Grewal, the 'head lawyer' referred to in the underlying articles, is a former United States federal (magistrate) judge. He was the judge who oversaw part of the Apple v. Samsung patent cases, some of the biggest technology cases litigated in history. In other words, he's basically as respected in the legal community as you can possibly im…

He's not betting his name as much as you think. It's normal for lawyers to continue having excellent careers after losing significant cases. (Also for full clarity magistrate judge is the lowest level in the federal system. Not that that isn't impressive, though)

Technically I'd say administrative law judges are a lower rung than US Magistrates, but yes, fair enough.

To be clear, though, Grewal was a magistrate in one of the most important districts (Northern District of California) on some of the most important cases in history.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#135

Post by JohnFen »

wslh wrote: post #114
JohnFen wrote: post #100

Earlier quoted context omitted.

> bad guys have, in general, better execution an exposure that the good ones. So much better that I take it purely on faith that there are decent people in that space. I have to take it on faith, because I haven't actually seen or heard from any of them and so have no evidence that they exist.

I consider others and my company, good actors in the space: think about the space critically and giving transparent feedback and scenarios between the skepticism and the utopia.

And you may well be -- but I don't know you or your company, so I have no way of knowing. The space is generally so tainted that it's not unreasonable to assume the people in it aren't exactly good until proven otherwise.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#136

Post by rchaud »

latchkey wrote: post #108
linuxftw wrote: post #102

Earlier quoted context omitted.

You're getting downvoted, but you're 100% correct.

> Why would Coinbase think that it could run a securities brokerage, exchange, and clearing house without registering with the SEC? Coinbase is a public company on NASDAQ. They are about as registered with the SEC, as possible. Update: cause I'm getting downvotes. See below. The point that I'm making is that if this company is acting illegally, then why is it still trading?

> Coinbase is a public company on NASDAQ. They are about as registered with the SEC, as possible.

That is not even close to correct. NASDAQ itself is a publicly traded company (quote: NDAQ), that nonetheless has to register separately as a securities exchange.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#137

Post by rchaud »

legitster wrote: post #127
chomp wrote: post #33

There's a few people picking sides here in the comments. Just reminding everybody that it's possible for two sides to be at issue; the SEC can be trying its best to apply its mandate in a world where technology has surpassed the law, and in a void of congressional action, and as a result giving very vague guidance so that it can squeeze its mandate into the crypto realm. And Coinbase can be purposely threading the ne…

I think part of the issue here is that the SEC is being decidedly coy. The remedy they are seeking is for the industry to essentially end itself. I think it's fine to say that the SEC is trying it's best to apply a mandate and them seeking guidance from congress are all good ideas, but them beating around the bush and attempting some subterfuge is not a good look for a regulatory agency.

> The remedy they are seeking is for the industry to essentially end itself.

Or in other words "register as securities exchange".

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#138

Post by rchaud »

vkou wrote: post #89
chomp wrote: post #33

There's a few people picking sides here in the comments. Just reminding everybody that it's possible for two sides to be at issue; the SEC can be trying its best to apply its mandate in a world where technology has surpassed the law, and in a void of congressional action, and as a result giving very vague guidance so that it can squeeze its mandate into the crypto realm. And Coinbase can be purposely threading the ne…

Why would the SEC need congressional action to regulate securities (which is what some of the crypto tokens traded on exchanges are)? Why would Coinbase think that it could run a securities brokerage, exchange, and clearing house without registering with the SEC? Just because you've added '... But on the internet' to your business model does not require additional legislature to determine whether or not you are tradi…

> Why would Coinbase think that it could run a securities brokerage, exchange, and clearing house without registering with the SEC?

They saw Uber and Airbnb steamroll through taxi and hotel regulations successfully. But that was local, and SEC is federal.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#139

Post by overthrow »

TimJRobinson wrote: post #93
overthrow wrote: post #70

Earlier quoted context omitted.

Gensler has publicly said “everything other than Bitcoin” is a security. https://cryptoslate.com/sec-chair-gensler-confirms-everythin... I'm not saying Coinbase has to agree with that decision, but it's a little silly they're posturing to the public like they're unaware. It's not exactly a secret. If they disagree then going to court is probably their only move.

That's not what he said. He said "Bitcoin is the only thing that is definitely not a security", everything else is undecided. Big difference. Terrible reporting from crypto slate even when it's an opinion piece.

Your quotation is not what he said. Here's the full paragraph from the original source:

https://nymag.com/intelligencer/2023/02/gary-gensler-on-meet...

> “Everything other than bitcoin,” Gensler told me, “you can find a website, you can find a group of entrepreneurs, they might set up their legal entities in a tax haven offshore, they might have a foundation, they might lawyer it up to try to arbitrage and make it hard jurisdictionally or so forth.” In other words, there are people behind these cryptocurrencies using a variety of complex and legally opaque mechanisms, but at the most basic level, they are trying to promote their tokens and entice investors. (Bitcoin, because of its unique history and creation story, is fundamentally different from other crypto projects in this respect.)

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#140

Post by wslh »

JohnFen wrote: post #135
wslh wrote: post #114

Earlier quoted context omitted.

I consider others and my company, good actors in the space: think about the space critically and giving transparent feedback and scenarios between the skepticism and the utopia.

And you may well be -- but I don't know you or your company, so I have no way of knowing. The space is generally so tainted that it's not unreasonable to assume the people in it aren't exactly good until proven otherwise.

Logically speaking you are saying that there is no exist good people in the space. That is a really difficult assertion to probe. I am saying something simpler: there exist good people in the space.

Then, you are saying "but I don't know you or your company, so I have no way of knowing.". Well, that is not my job, do your work if you want to change your mind. If you need help I can present you to good people but I assume you can do it by yourself.

Also, again logically, saying that there is no good people in the space, we should first define good people in general. Not trying to sound pedantic but trying to show you that your assertion is about a lot of people, probably in the order or millions.

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